BitWage Provides an IBAN Number for Everybody: Freelancers Worldwide Receive their Salary with Bitcoin
With BitWage you can receive your wage in bitcoin instead of fiat money. The startup from California aims to strengthen its presence in Europe. To do so, it opened a new office in Paris and implemented the option to give every customer their own IBAN number. CEO Jonathan Chester explains why and tells of two classes of customers using BitWage.
The basic concept of BitWage is pretty easy to explain; you want to get your salary or your fee in bitcoin instead of fiat money like the dollar or euro, but your boss or customer does not want to touch such a thing like bitcoin. What do you do now? You register at BitWage, get a bank number of the startup, write this bank number on your invoice, and when the boss or customer pays, BitWage gets the fiat money and gives you bitcoin.
“First we helped companies to pay workers in bitcoin,” BitWage CEO Jonathan Chester says, “but there have been a lot of issues around that. Basically, the companies have been afraid of the technology.” In late 2014 BitWage introduced the option to “allow workers to receive wages in bitcoin without the company to sign up.” And since then the startup is on a growth path. As of today, BitWage has around 11,000 customers globally and an impressive monthly growth rate of five to 20 percent.
Since as little as ten to 15 percent of the payment volume of BitWage serves the European markets, the startup is currently trying to gain a bigger foothold on the continent. After receiving a grant from the French government, BitWage recently opened up an office in Paris. Besides expansion of their presence, the company wants to win new customers with a new and special product; every customer can get his own IBAN number. This does not only optimize internal processes and makes payments faster, but also enables everyone in the world (except US citizens) to use an IBAN number without having a bank account in the SEPA zone.
The knowledge Jonathan gathered about his customers so far indicates that the newly-introduced option might be interesting for many. While the biggest channel for payment goes from companies of the US to people in Brazil, from Europe, most payments go again to Brazil, but also to Eastern Europe and Africa. Jonathan differentiates between two classes of channels.
Roughly 35 percent of the transaction volume of BitWage goes from companies in rich countries to people in rich countries:
“These are mostly investors, which are employed at companies. They use BitWage to regularly buy bitcoins because it is an easy and convenient option to invest parts or their income in bitcoin.”
However, the bulk of BitWage’s transaction flow, 65 percent, goes from companies in rich countries to people in low-income countries like in Southern America, Eastern Europe or Africa:
“Here it is less about investment but about payment. The customers here are mostly freelancers who did a job for a first-world company and want to get their payment quick and convenient. Many exchange the bitcoins they get in national currencies, but many also keep it, as bitcoins are often superior as a store of value.”
Brazil is a huge market for BitWage due to a “really bad banking system” which requires up to 14 days to process cross-border payments. In Europe, Jonathan sees a lot of interest of freelancers in Eastern Europe and Africa, more precisely from Nigeria, Morocco, Ukraine, Romania, and Poland. For those people, BitWage is especially useful, as they can now just write an IBAN number in their invoice and easily receive bitcoins.